City considers alternative funding for projects
DIXON – The city is considering changing how it’s paying for two multimillion-dollar projects, but the City Council wants to take a closer look at the pros and cons before doing so.
About 2 years ago, the city received a $2 million Illinois Transportation Enhancement Program grant to extend its bike path 1.6 miles – stretching east on River Road toward Raynor Garage Doors and west on River Road with a ramp to the viaducts running to Seventh Street.
The city is required to pay a $400,000 grant match for the project, and City Manager Danny Langloss told the council earlier this month that the city’s share could be as high as $1.2 million, conservatively.
He said Monday that number more likely will land somewhere between $726,000 and $800,000 for engineering costs and the local match, but they could run into financial trouble if the council decides to take all of that from the capital fund rather than from Rita Crundwell recovery dollars.
If they took the full amount out of the capital fund, the city is projected to have to dip into its $3 million capital reserves within a year, he said.
The council signed off last year on using $210,215 in recovery money toward the project, and the city has paid about $177,000 in engineering fees so far.
The council planned to vote on a budget amendment Monday t hat would pay for engineering costs, about $326,000, out of the capital fund and reimburse the money spent from recovery, but decided to hold off and have a work session on the issue at a later meeting to figure out how much to pay from either fund.
There’s also going to be a work session taking another look at funding the ongoing $3 million water meter replacement project.
The city is lending itself $3 million from reserves to pay for the project, to be repaid through water and sewer revenue across 10 years at 1 percent interest, but there’s concern that they might want that money available for future projects or to put toward pension funding.
Finance Director Becky Fredericks said they’ve already paid about $500,000 toward the water meter project.
Other options would be to pursue bonds or a bank loan.